SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-Q
[x] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended October 31, 1994
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission file number 1-8570
CIRCUS CIRCUS ENTERPRISES, INC.
(Exact name of registrant as specified in its charter)
Nevada 88-0121916
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
2880 Las Vegas Boulevard South, Las Vegas, Nevada 89109-1120
(Address of principal executive offices)
(702) 734-0410
(Registrant's telephone number, including area code)
N/A
(Former name, former address and former fiscal year, if changed since
last report)
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such shorter
period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days.
Yes X No
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date.
Class Outstanding at November 30, 1994
Common Stock, $.01-2/3 par value 85,719,334 shares
CIRCUS CIRCUS ENTERPRISES, INC. AND SUBSIDIARIES
Form 10-Q
INDEX
Page No.
Part I. FINANCIAL INFORMATION
Item 1. Financial Statements:
Condensed Consolidated Balance Sheets at
October 31, 1994 (Unaudited) and January 31,
1994........................................... 3-4
Condensed Consolidated Statements of Income
(Unaudited) for the Three and Nine Months
Ended October 31, 1994 and 1993................ 5
Condensed Consolidated Statements of Cash
Flows (Unaudited) for the Nine Months
Ended October 31, 1994 and 1993................ 6
Notes to Condensed Consolidated Financial
Statements (Unaudited)......................... 7-15
Item 2. Management's Discussion and Analysis of Fi-
nancial Condition and Results of Operations.... 16-20
Part II. OTHER INFORMATION 21-22
Part I. FINANCIAL INFORMATION
Item 1. Financial Statements
CIRCUS CIRCUS ENTERPRISES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
ASSETS
October 31, January 31,
1994 1994
(Unaudited)
CURRENT ASSETS:
Cash and cash equivalents................ $ 54,003 $ 39,110
Receivables.............................. 9,578 8,673
Inventories.............................. 23,764 20,057
Prepaid expenses......................... 22,799 20,062
Total current assets................ 110,144 87,902
PROPERTY, EQUIPMENT AND LEASEHOLD INTERESTS,
at cost, less accumulated depreciation
and amortization of $394,137 and $336,287
respectively............................. 1,258,028 1,179,961
EXCESS OF PURCHASE PRICE OVER FAIR MARKET
value of net assets acquired, net........ 9,927 10,200
INVESTMENTS IN JOINT VENTURES............... 70,276 3,203
OTHER ASSETS................................ 28,667 16,658
Total Assets......................... $1,477,042 $1,297,924
The accompanying notes are an integral part of these
condensed consolidated financial statements.
CIRCUS CIRCUS ENTERPRISES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share data)
LIABILITIES AND STOCKHOLDERS' EQUITY
October 31, January 31,
1994 1994
(Unaudited)
CURRENT LIABILITIES:
Current portion of long-term debt................ $ 149 $ 169
Accounts payable - trade ........................ 15,948 14,804
Accounts payable - construction.................. 16,894 13,844
Accrued liabilities ............................. 83,654 59,438
Income tax payable .............................. 8,824 3,806
Total current liabilities ................ 125,469 92,061
LONG-TERM DEBT ...................................... 608,150 567,345
DEFERRED INCOME TAX ................................. 89,913 77,153
OTHER LONG-TERM LIABILITIES ......................... 1,335 1,415
Total liabilities ........................ 824,867 737,974
STOCKHOLDERS' EQUITY:
Common stock, $.01-2/3 par value
Authorized - 450,000,000 shares
Issued - 96,308,643 and 96,168,769 shares ..... 1,605 1,603
Preferred stock, $.01 par value
Authorized - 75,000,000 shares ................ - -
Additional paid-in capital ...................... 121,864 120,135
Retained earnings ............................... 723,881 618,446
Treasury stock (10,589,309 and 10,062,814 shares),
at cost........................................ (195,175) (180,234)
Total stockholders' equity ............... 652,175 559,950
Total Liabilities and
Stockholders' Equity .................. $1,477,042 $1,297,924
The accompanying notes are an integral part of these
condensed consolidated financial statements.
CIRCUS CIRCUS ENTERPRISES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except share data)
(Unaudited)
Three Months Nine Months
Ended October 31, Ended October 31,
REVENUES: 1994 1993 1994 1993
Casino ......................... $161,616 $138,542 $463,322 $391,172
Rooms .......................... 60,688 44,732 173,724 123,488
Food and beverage .............. 49,023 38,385 146,673 108,490
Other .......................... 44,722 32,275 133,837 86,426
316,049 253,934 917,556 709,576
Less-complimentary allowances .. (9,436) (7,507) (26,147) (21,217)
306,613 246,427 891,409 688,359
COSTS AND EXPENSES:
Casino ......................... 63,663 52,679 183,334 149,560
Rooms .......................... 24,052 19,659 72,124 55,591
Food and beverage .............. 45,864 37,571 138,233 105,017
Other operating expenses ....... 28,068 21,578 82,548 56,880
General and administrative ..... 48,014 39,240 136,755 105,383
Depreciation and amortization .. 20,345 14,059 61,239 37,860
Preopening expense.............. 3,012 16,506 3,012 16,506
233,018 201,292 677,245 526,797
OPERATING PROFIT BEFORE CORPORATE
EXPENSE ........................ 73,595 45,135 214,164 161,562
CORPORATE EXPENSE ................ 5,381 5,399 16,695 11,767
INCOME FROM OPERATIONS ........... 68,214 39,736 197,469 149,795
OTHER INCOME (EXPENSE):
Interest, dividend and
other income (expense)........ 28 (632) (572) (849)
Interest expense ............... (10,528) (3,786) (31,193) (7,353)
(10,500) (4,418) (31,765) (8,202)
INCOME BEFORE PROVISION FOR
INCOME TAX...................... 57,714 35,318 165,704 141,593
Provision for income tax ....... 21,118 14,796 60,269 50,929
NET INCOME ....................... $ 36,596 $ 20,522 $105,435 $ 90,664
EARNINGS PER SHARE................ $ .43 $ .24 $ 1.23 $ 1.04
Average shares outstanding ... 85,705,133 87,319,627 85,827,063 87,310,552
The accompanying notes are an integral part of these
condensed consolidated financial statements.
CIRCUS CIRCUS ENTERPRISES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
Nine Months
Ended October 31,
1994 1993
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $105,435 $ 90,664
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization 62,468 38,315
(Gain) loss on sale of fixed assets 800 1,349
(Increase) decrease in other current assets (7,349) (8,299)
(Increase) decrease in other non-current assets 5,315 (2,016)
Increase (decrease) in interest payable 8,557 8,796
Increase (decrease) in income tax payable 5,018 5,311
Increase (decrease) in other current liabilities 16,803 45,795
Increase (decrease) in deferred taxes 12,760 781
Increase (decrease) in other non-current
liabilities (49) (49)
Total adjustments 104,323 89,983
Net cash provided by operating activities 209,758 180,647
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures (141,464) (341,146)
Increase (decrease) in construction payables 3,050 (9,181)
Increase in investments in joint ventures (67,073) -
Loans to joint ventures (17,298) -
Proceeds from sale of equipment and other assets 400 295
Net cash used in investing activities (222,385) (350,032)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net effect on cash of issuances and payments
of debt with initial maturities of
three months or less 40,886 (78,206)
Principal payments of debt with original
maturities in excess of three months (125) (114)
Issuance of senior subordinated debt - 299,841
Exercise of stock options and warrants 1,821 5,444
Purchases of treasury stock and fractional shares (15,031) (29,045)
Other (31) (31)
Net cash provided by financing activities 27,520 197,889
Net increase in cash and cash equivalents 14,893 28,504
Cash and cash equivalents at beginning of period 39,110 43,415
Cash and cash equivalents at end of period $ 54,003 $ 71,919
SUPPLEMENTAL CASH FLOW DISCLOSURES
Cash paid during the period for:
Interest (net of amount capitalized) $ 21,831 $ -
Income tax $ 42,500 $ 40,000
Noncash investing and financing activities:
Purchase of land with debt $ - $ 10,000
The accompanying notes are an integral part of these
condensed consolidated financial statements.
CIRCUS CIRCUS ENTERPRISES, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(All information for the three and nine months ended October 31,
1994 and 1993 is unaudited.)
(1) Principles of consolidation and basis of presentation -
Circus Circus Enterprises, Inc. (the "Company") was
incorporated February 27, 1974. The Company operates hotel and
casino facilities in Las Vegas, Reno and Laughlin, Nevada and
opened Circus Circus-Tunica, a riverboat casino in Tunica County,
Mississippi, on August 29, 1994. It is also a joint venture partner
in a casino operation in Windsor, Canada.
The condensed consolidated financial statements include the
accounts of the Company and its wholly-owned subsidiaries.
Material intercompany accounts and transactions have been
eliminated.
The condensed consolidated financial statements included
herein have been prepared by the Company, without audit, pursuant
to the rules and regulations of the Securities and Exchange
Commission. Certain information and footnote disclosures
normally included in financial statements prepared in accordance
with generally accepted accounting principles have been condensed
or omitted pursuant to such rules and regulations, although the
Company believes that the disclosures are adequate to make the
information presented not misleading. In the opinion of
management, all adjustments (which include normal recurring
adjustments) necessary for a fair statement of results for the
interim periods have been made. The results for the three-month
and nine-month periods are not necessarily indicative of results
to be expected for the full fiscal year.
Certain reclassifications have been made to the financial
statements for the three and nine months ended October 31, 1993 to
conform to the financial statement presentation for the three and
nine months ended October 31, 1994. These reclassifications have
no effect on net income.
These financial statements should be read in conjunction
with the financial statements and notes thereto included in the
Company's annual report on Form 10-K for the year ended
January 31, 1994.
(2) Long-term debt -
Long-term debt consists of the following (in thousands):
October 31, January 31,
1994 1994
(Unaudited)
Amounts due under corporate
debt program at floating
interest rates, currently at
approximately 5.4% $208,336 $167,450
7-5/8% Senior Subordinated
Debentures due 2013 150,000 150,000
6-3/4% Senior Subordinated Notes
due 2003 (net of unamortized
discount of $139 and $150) 149,861 149,850
10-5/8% Senior Subordinated Notes
due 1997 (net of unamortized
discount of $47 and $60) 99,953 99,940
Other notes 149 274
608,299 567,514
Less - current portion (149) (169)
$608,150 $567,345
The Company has established a corporate debt program whereby
it can issue commercial paper or similar forms of short-term debt.
Although the debt instruments issued under this program are short-
term in tenor, they are classified as long-term debt because (i)
they are backed by long-term debt facilities (see below) and (ii)
it is management's intention to continue to replace such
borrowings on a rolling basis as various instruments come due and
to have such borrowings outstanding for longer than one year. To
the extent that the Company incurs debt under this debt program,
it must maintain an equivalent amount of credit available under
its revolving credit and term loan agreements with its bank
group.
In September 1993, the Company renegotiated its $350 million
reducing revolver dated April 11, 1990 and its $200 million
reducing revolver dated September 6, 1988. These agreements were
replaced by new revolving loan agreements consisting of a $250
million unsecured 364-day facility and a $500 million unsecured
reducing revolver which matures in September 1998 (the
"Revolvers"). The $250 million facility has provisions for annual
renewal subject to the consent of the banks and converts to a two-
(2) Long-term debt (continued)-
year term loan if not renewed. The Revolvers contain financial
covenants regarding minimum net worth, interest charge coverage,
maximum leverage ratio, new venture capital expenditures and new
venture investments. The maximum available credit under the $500
million revolver reduces by $60 million on March 31, 1997,
September 30, 1997 and March 31, 1998. The Revolvers are for
general corporate purposes. The Company currently incurs
commitment fees of 18.75 basis points on the unused portion of
the $250 million facility and 22.50 basis points on the unused
portion of the $500 million revolver. As of October 31, 1994, the
Company had no direct borrowings under the Revolvers. At such
date, the Company had $208.3 million issued under the corporate
debt program thus reducing, by that amount, the credit available
under the Revolvers for purposes other than repayment of the
corporate debt. The fair value of the debt issued under the
corporate debt program approximates the carrying amount of the debt
due to the short-term maturities of the individual components of
the debt.
In July 1993, the Company issued $150 million principal
amount of 6-3/4% Senior Subordinated Notes (the "6-3/4% Notes")
due July 2003 and $150 million principal amount of 7-5/8% Senior
Subordinated Debentures (the "7-5/8% Debentures") due July 2013,
with interest payable each January and July. The 6-3/4% Notes,
which were discounted to $149.8 million, and the 7-5/8% Debentures
are not redeemable prior to maturity and are not subject to any
sinking fund requirements. The net proceeds from these offerings
were used primarily to repay borrowings under the Company's
corporate debt program.
In June 1990, the Company issued $100 million principal
amount of 10-5/8% Senior Subordinated Notes (the "10-5/8% Notes")
due June 1997, with interest payable each June and December. The
10-5/8% Notes, which were discounted to $99.9 million are not
redeemable prior to maturity and are not subject to any sinking
fund requirements. Holders of the 10-5/8% Notes may require the
Company to repurchase all or any portion of their notes at par
upon the occurrence of both a Designated Event (as defined in the
indenture) and a Rating Decline (as defined in the indenture). As
of October 31, 1994, $9.1 million principal amount of the 10-5/8%
Notes was owned by one of the Company's two founders.
(2) Long-term debt (continued) -
The Company has a policy aimed at managing interest rate
risk associated with its current and future anticipated
borrowings. This policy enables the Company to use any
combination of interest rate swaps, futures, options, caps and
similar arrangements. The Company has entered into various
interest rate swaps, principally with its bank group, to manage
interest expense, which is subject to fluctuation due to the
variable rate nature of the debt under the Company's corporate
debt program. The Company has interest rate swap agreements
under which it pays a fixed interest rate (weighted average of
approximately 8.9%) and receives a variable interest rate
(weighted average of approximately 5.3% at October 31, 1994) on
$90 million notional amount of "initial" swaps, and pays a
variable interest rate (weighted average of approximately 5.4% at
October 31, 1994) and receives a fixed interest rate (weighted
average of approximately 7.6%) on $95 million notional amount of
"reversing" swaps. The net effect of all such swaps resulted in
additional interest expense for the three and nine months, due to
an interest rate differential which, at October 31, 1994, was
approximately .66% on the total notional amount of the swaps.
The initial swaps have the following termination dates: $35
million in fiscal 1996, $30 million in fiscal 1997 and $25
million in fiscal 2000. The reversing swaps expire as follows:
$35 million in fiscal 1996, $30 million in fiscal 1997 and $30
million in fiscal 2002. In addition to the aforementioned swaps,
the Company has entered into an interest rate swap with a
notional amount of $100 million in which the Company pays a
floating rate (4.9% at October 31, 1994 and capped at 6.5%) and
receives a fixed interest rate of 4.75%. This swap corresponds in
both notional amount and maturity to the Company's 10-5/8% Notes
due in 1997. The variable interest rates which the Company pays
or receives under the various swaps are based primarily upon the
London Interbank Offering Rate (LIBOR). The Company is exposed
to credit loss in the event of nonperformance by the other
parties to the interest rate swap agreements. However, the
Company considers the risk of nonperformance by the counter-
parties to be minimal because the parties to the swaps and
reverse swaps are predominantly members of the Company's bank
group.
(2) Long-term debt (continued) -
As of October 31, 1994, under the Company's most restrictive
loan covenants, the Company was restricted as to the payment of
dividends or the purchase of its own capital stock in excess of
approximately $70 million and was restricted from issuing
additional debt in excess of approximately $559 million.
(3) Warrants, stock options, stock rights and share repurchases -
In June 1989, the stockholders approved a stock purchase
warrant plan enabling the Company to offer warrants to its
officers and other key employees to purchase up to 4.5 million
shares of the Company's common stock. In accordance with the
provisions of such plan, the 4.5 million warrants were issued in
June 1989 at a price of $.17 per warrant with an exercise price
of $14.33 ($.67 per share over the fair market value on the date
the warrants were authorized). Each warrant has a term of seven
years, with 50% of the warrants becoming exercisable two years
from the date of grant and the remaining 50% three years from the
date of grant. As of October 31, 1994, warrants representing 3.5
million shares had been exercised. No warrants were exercised
during the nine months ended October 31, 1994.
The Company also has various stock option plans for
executive, managerial and supervisory personnel as well as the
Company's outside directors and consultants. The plans permit
grants of options, performance shares and restricted stock
relating to the Company's common stock. As of October 31, 1994,
options for a total of 13.6 million shares have been granted, of
which options for 5.5 million shares were exercised, options for
3.6 million shares were canceled and options for 4.5 million
shares remained exercisable at prices ranging from $8.58 to
$39.34 with a weighted average exercise price of $28.10 per
share. In November 1994, replacement options to purchase an
aggregate of approximately 4.0 million shares of the Company's
Common Stock were awarded at an exercise price of $21.25 per
share, subject to the surrender for cancellation of options to
purchase a like number of such shares exercisable at prices in
excess of $21.25. The weighted average exercise price of the
options outstanding on October 31, 1994, adjusted at such date to
give full effect to the aforementioned repricing, would have been
$20.91. During the nine months ended October 31, 1994, options
for 148,379 shares were exercised at prices ranging from $8.58 to
$15.29 with a weighted average exercise price of $12.12 per
share. As of October 31, 1994, options covering 3.0 million
shares remained available for grant.
(3) Warrants, stock options, stock rights and share repurchases
(continued) -
The stock options, both incentive and nonqualified, granted
prior to 1988 are immediately exercisable. The stock options
granted in 1988 and thereafter are exercisable in one or more
installments beginning not less than nine months after the grant
date.
On July 14, 1994, the Company declared a dividend of one
common stock purchase right (the "Rights") for each share of
common stock outstanding at the close of business on August 15,
1994. Until the "Distribution Date" (as defined) a Right will
also accompany each new share of common stock issued by the
Company. Each Right entitles the registered holder thereof,
after the Rights become exercisable and until August 15, 2004 (or
the earlier redemption, exchange or termination of the Rights),
to purchase from the Company one share of common stock at an
exercise price of $125, subject to certain antidilution
adjustments. The Rights, unless earlier redeemed, exchanged or
voided, will become exercisable on the earlier to occur of (i) 10
days following a public announcement that a Person or group of
affiliated or associated Persons has acquired, or obtained the
right to acquire, beneficial ownership of 10% or more of the
common stock (an "Acquiring Person"), or (ii) 10 days after a
Person or group commences, or announces an intention to commence,
a tender or exchange offer, the consummation of which would
result in the beneficial ownership by a Person or group of 10% or
more of the common stock (the "Distribution Date").
Among other provisions applicable to the Rights, in the
event that a person becomes an Acquiring Person or the Company
becomes the surviving corporation in a merger with an Acquiring
Person or any affiliate or associate of an Acquiring Person and
the common stock is not changed or exchanged, each Right, other
than Rights that are or were acquired or beneficially owned by
the Acquiring Person (which Rights will thereafter be void), will
thereafter entitle the holder to receive upon exercise common
stock having a market value of two times the exercise price of
the Right. The Rights are redeemable by the Company at a price
of $.01 per Right at any time prior to the close of business on
the first date of public announcement that a person or group has
become an Acquiring Person, and expire on August 15, 2004 (unless
earlier redeemed or exchanged), subject to the Company's right to
extend such date.
During the nine months ended October 31, 1994, the Company
repurchased 535,000 shares of its common stock at a cost of
$15.0 million.
(4) Preferred stock -
The Company is authorized to issue up to 75 million shares
of $.01 par value preferred stock in one or more series having
such respective terms, rights and preferences as are designated
by the Board of Directors. No preferred stock has yet been
issued.
(5) Earnings per share -
Earnings per share is computed by dividing net income by the
weighted average number of common shares outstanding during the
period. Outstanding stock options and warrants are not included
in earnings per share computations since their exercise would not
have a material dilutive effect.
(6) Investments in joint ventures-
The Company has investments in joint ventures that are
accounted for on the equity method. Under the equity method,
original investments are recorded at cost and adjusted by the
Company's share of earnings or losses of these companies.
Investments in joint ventures consist of the following (in
thousands):
October 31, January 31,
1994 1994
(Unaudited)
Circus and Eldorado Joint Venture (50%)
(Hotel/Casino, Reno, Nevada) $ 52,589 $ 2,706
Windsor Casino Limited (33-1/3%)
(Hotel/Casino, Windsor, Canada) 6,528 424
American Entertainment L.L.C. (50%)
(Riverboat Casino, Chalmette, LA) 11,159 73
$ 70,276 $ 3,203
As of October 31, 1994, the Circus and Eldorado Joint Venture and
American Entertainment, L.L.C. were still in the development or
construction stage and had not generated any earnings or losses.
For additional information on these projects, see Note 7-
Commitments and contingent liabilities.
(7) Commitments and contingent liabilities -
In December 1993, Windsor Casino Limited, a joint venture
composed equally of Circus Circus Enterprises, Inc., Caesars
World, Inc. and Hilton Hotels Corporation or their subsidiaries,
was selected to exclusively negotiate an agreement to design,
build and operate a casino complex in Windsor, Ontario, Canada.
The planned complex includes casino, showroom and meeting
facilities as well as a 300-room hotel, all located in Windsor's
central business district, immediately across the Detroit River
from Detroit, Michigan. A temporary casino opened May 14, 1994
and is operated by Windsor Casino Limited pending the expected
completion of a permanent facility in 1997. The joint venturers
are currently negotiating an agreement for the permanent facility
and consequently the terms and conditions of the project are
still being finalized. As of October 31, 1994, Circus had a net
investment in the joint venture of approximately $6.5 million.
The Company has entered into a 50/50 joint venture with the
Eldorado Limited Liability Company (the "Eldorado"), a privately
held company, to develop and operate a hotel/casino in downtown
Reno, Nevada. Project "C" is themed after a turn-of-the-century
mining town and is located on a site adjacent to Circus
Circus-Reno and the Eldorado. The project broke ground in late
1993 and completion is expected by mid-1995. The cost of the
project is currently estimated at approximately $335 million
(excluding capitalized interest and preopening expenses), of
which the venturers have contributed $102 million in equity. The
Company is also obligated under the joint venture agreement to
obtain or provide financing for the remaining project costs and
to provide a $10 million credit line for working capital
purposes. If the Company provides financing, the loan would bear
interest at an agreed upon rate of 10%. Assuming a 10% rate, it
is estimated the project would incur $10-$11 million in interest
during the construction phase. As of October 31, 1994, the
Company had a net investment in the joint venture of
approximately $52.6 million and a loan to the joint venture of
$7.3 million. The Company will continue to fund the project over
its required equity contribution until financing is obtained.
The Company has entered into a 50/50 joint venture with
American Entertainment Corporation to develop and operate a
riverboat gaming facility in Louisiana. The riverboat will
feature a 30,000-square-foot casino and will be docked in
Chalmette, Louisiana, approximately 20 minutes from downtown New
Orleans. Construction has begun on the vessel, though the full
scope of the project has not yet been finalized. The Company is
(7) Commitments and contingent liabilities -
required to contribute $20 million in equity and use commercially
reasonable efforts to obtain financing for the project, although
the Company is not obligated to use its own funds. The project
is currently expected to be completed by fall 1995. As of
October 31, 1994, the Company had a net investment in the joint
venture of approximately $11.2 million and a loan to the joint
venture of $10 million.
The Company is a defendant in various pending litigation.
In management's opinion, the ultimate outcome of such litigation
will not have a material effect on the results of operations or
the financial position of the Company.
RESULTS OF OPERATIONS
Earnings per Share
For the third quarter ended October 31, 1994, the Company
reported net income of $36.6 million, or $.43 per share, versus
$20.5 million, or $.24 per share last year. For the nine months,
net income was $105.4 million, or $1.23 per share, against $90.7
million, or $1.04 per share a year ago. Current year results
include the one-time write-off of approximately $3.0 million of
preopening expenses related to the August 29 opening of Circus
Circus-Tunica. These preopening expenses amounted to $.02 per
share on an after-tax basis.
Prior year results reflect the write-off of $16.5 million of
preopening expenses related to the August 23, 1993 opening of
Grand Slam Canyon and the October 15, 1993 opening of Luxor.
These preopening expenses amounted to $.12 per share on an after-
tax basis. Prior year results also include a one-time, catch-up
adjustment of approximately $3.4 million, or $.04 per share, for
additional income taxes due to the increased corporate tax rate
mandated by the Revenue Reconciliation Act of 1993.
On the same basis of operations (excluding the non-recurring
items noted above), earnings per share for the three and nine
months ended October 31, 1994 were $.45 and $1.25, versus $.40
and $1.20 in the prior year. During the quarter, the Company
benefited from strong operating results at Circus Circus-Tunica
(which was open only two months of the quarter), and from
earnings generated by Luxor (which was open only 17 days in the
prior year quarter). These benefits were partially offset by
additional interest expense of $6.7 million and $23.8 million in
the three and nine month periods, stemming from higher debt
levels and lower capitalized interest.
Revenues
Revenues for the Company increased $60.2 million, or 24%, for the
three months and $203.1 million, or 29%, for the nine months,
compared to the prior year. Luxor was the principal factor in
this growth, posting revenues of $68.7 million in the quarter and
$211.1 million in the nine month period. Circus Circus-Tunica
was also a significant contributor, generating revenues over $15
million in just two months of operations.
Revenues at Circus Circus-Las Vegas, Excalibur and Circus Circus-
Reno were comparable with the prior year, both in the quarter and
on a year-to-date basis. On a combined basis, the Company's
Laughlin properties reported an 11% decrease in revenues in the
quarter and an 8% decline year-to-date, reflecting the continued
effects of increased competition in that market.
Operating Income
Income from operations (excluding the write-off of preopening
expenses) increased $15.0 million, or 27%, in the three months
and $34.2 million, or 21%, in the nine months, versus the
comparable periods last year. The Company's composite operating
margin (excluding the write-off of preopening expenses) was 23.2%
and 22.5% for the three and nine months, versus 22.8% and 24.2%
last year.
Luxor was the main factor in the increase in operating income,
posting results of $15.3 million and $47.3 million for the third
quarter and nine months. Additionally, Circus Circus-Tunica
contributed operating income (before preopening expenses) of $6.5
million for both the quarter and nine months. Operating results
at the Company's other properties were essentially flat in both
the three and nine month periods, with the exception of the
Colorado Belle and Edgewater in Laughlin.
The Laughlin market continues to be hampered by competition both
within the market and from the new resorts in Las Vegas. This
increased competition is particularly evident in occupancy levels
and room rates. For the nine month period ending September 30,
1994, room occupancy in the Laughlin market was 90.7% versus
93.7% a year ago, and average room rates also declined. These
factors continue to depress operating results at the Colorado
Belle and the Edgewater, whose combined operating income fell 27%
in the third quarter and 22% in the nine months versus the
similar periods last year.
In Windsor, Canada, the Company's share of results from the
temporary casino which opened May 14, 1994 contributed $1.5
million to operating income in the third quarter and $3.4 million
year-to-date.
Interest Expense
Interest expense increased $6.7 million and $23.8 million for the
three and nine months compared to the prior year. The increase
was due to a combination of lower capitalized interest and higher
borrowings. Capitalized interest was $1.5 million and $2.9
million for the three months and nine months ended October 31,
1994 versus $7.3 million and $18.5 million a year ago when Luxor
and Grand Slam Canyon were still under construction for a portion
of the period. At October 31, 1994, long-term debt stood at $608
million compared to $530 million at October 31, 1993. The
increase in the debt level was attributable primarily to
expenditures related to Circus Circus-Tunica, as well as the
Company's investment in Project "C" in Reno, Nevada.
Income Tax
The Company's effective tax rate for the three and nine months
ended October 31, 1994 was slightly over 36%. This reflects the
corporate statutory rate of 35% pursuant to the Revenue
Reconciliation Act of 1993 plus the effect of various non-
deductible expenses. The effective tax rate for the three and
nine months ended October 31, 1993 was 42% and 36%. During the
prior year quarter, the Company made a one-time, catch-up
adjustment to income taxes to reflect the increase in the
corporate statutory rate from 34% to 35% pursuant to the Revenue
Reconciliation Act of 1993, which was made effective retroactive
to the beginning of the year.
Financial Position and Capital Resources
The Company had cash and cash equivalents of $54.0 million at
October 31, 1994 reflecting normal operating needs. The
Company's pre-tax cash flow from operations (before preopening
expenses) was $92.0 million and $262.9 million for the three and
nine months ended October 31, 1994 versus $70.7 million and
$204.6 million in the prior year, increases of 30% and 29%,
respectively. In this context, pre-tax cash flow from operations
is defined as the Company's income from operations plus non-cash
operating expenses (primarily depreciation and amortization).
Capital expenditures for the three and nine months ended October
31, 1994 were $55.9 million and $141.5 million. Of these
amounts, $41.4 million and $69.2 million related to construction
of the riverboat casino in Tunica, Mississippi. Capital
expenditures for the nine months also include $11.9 million for
the purchase of land for future expansion of Circus Circus-Reno;
$11.7 million for the construction of the new parking garages at
Luxor and Excalibur; and $13.5 million for the expansion of Grand
Slam Canyon.
The Company also funded net equity investments in new projects
totalling $16.8 million during the third quarter and $67.1
million for the nine months. These equity investments include
the temporary casino in Windsor, Canada ($6.5 million net since
inception); Project "C" in Reno, Nevada ($52.6 million net since
inception); and the riverboat casino in Chalmette, Louisiana
($11.2 million net since inception). In addition to its equity
investments, the Company has loaned Project "C" $7.3 million, and
Chalmette $10.0 million.
During the first quarter, the Company repurchased 535,000 shares
of its common stock at a total cost of approximately $15.0
million.
In July 1993, the Company issued $150 million principal amount of
6-3/4% Senior Subordinated Notes due 2003. The notes were priced
at 99.894%. Also in July 1993, the Company issued, at par, $150
million principal amount of 7-5/8% Senior Subordinated Debentures
due 2013. The net proceeds of these offerings were used to
retire amounts outstanding under the Company's short term debt
program. The intention of the Company was to position itself for
long-term growth by securing additional long-term capital at
attractive interest rates.
In September 1993, the Company negotiated a $750 million
unsecured bank credit facility with its bank group. The Managing
Agent for the facility is Bank of America with Canadian Imperial
Bank of Commerce acting as Co-Managing Agent. This facility
replaced the Company's previous $350 million and $200 million
reducing revolvers.
On August 29, 1994, the Company's newest property, Circus Circus-
Tunica, opened in Tunica County, Mississippi, approximately 20
miles from the Memphis, Tennessee airport. This circus-themed
project was completed on schedule at a total cost of
approximately $80 million, including land, capitalized interest
and preopening expenses. The property features 1,451 slot
machines, 66 table games, three restaurants and a gift shop.
In December 1993, Windsor Casino Limited, a joint venture
composed equally of Circus Circus Enterprises, Inc., Caesars
World, Inc. and Hilton Hotels Corporation or their subsidiaries,
was selected to exclusively negotiate an agreement to design,
build and operate a casino complex in Windsor, Ontario, Canada.
The planned complex includes casino, showroom and meeting
facilities as well as a 300-room hotel, all located in Windsor's
central business district, immediately across the Detroit River
from Detroit, Michigan. A temporary casino opened May 14, 1994
and is operated by Windsor Casino Limited pending the expected
completion of a permanent facility in 1997. The joint venturers
are currently negotiating an agreement for the permanent facility
and consequently the terms and conditions of the project are
still being finalized. As of October 31, 1994, Circus had a net
investment in the joint venture of approximately $6.5 million.
The Company has entered into a 50/50 joint venture with the
Eldorado Limited Liability Company (the "Eldorado"), a privately
held company, to develop and operate a hotel/casino in downtown
Reno, Nevada. Project "C" is themed after a turn-of-the-century
mining town and is located on a site adjacent to Circus
Circus-Reno and the Eldorado. The project broke ground in late
1993 and completion is expected by mid-1995. The cost of the
project is currently estimated at approximately $335 million
(excluding capitalized interest and preopening expenses), of
which the venturers have contributed $102 million in equity. The
Company is also obligated under the joint venture agreement to
obtain or provide financing for the remaining project costs and
to provide a $10 million credit line for working capital
purposes. If the Company provides financing, the loan would bear
interest at an agreed upon rate of 10%. Assuming a 10% rate, it
is estimated the project would incur $10-$11 million in interest
during the construction phase. As of October 31, 1994, the
Company had a net investment in the joint venture of
approximately $52.6 million and a loan to the joint venture of
$7.3 million. The Company will continue to fund the project over
its required equity contribution until financing is obtained.
The Company has entered into a 50/50 joint venture with American
Entertainment Corporation to develop and operate a riverboat
gaming facility in Louisiana. The riverboat will feature a
30,000-square-foot casino and will be docked in Chalmette,
Louisiana, approximately 20 minutes from downtown New Orleans.
Construction has begun on the vessel, though the full scope of
the project has not yet been finalized. The Company is required
to contribute $20 million in equity and use commercially
reasonable efforts to obtain financing for the project, although
the Company is not obligated to use its own funds. The project
is currently expected to be completed by fall 1995. As of
October 31, 1994, the Company had a net investment in the joint
venture of approximately $11.2 million and a loan to the joint
venture of $10 million.
The Company believes that it has sufficient capital resources
through its bank agreements and its operating cash flows to meet
all of its existing cash obligations, strategically repurchase
shares and fund its commitments on each of the above discussed
projects. The Company anticipates that additional funds could,
however, be raised through debt or equity markets if necessary.
PART II. OTHER INFORMATION
Item 1. Legal Proceedings.
Reference is made to Item 1 of the Company's Quarterly
Reports on Form 10-Q for the fiscal quarters ended April 30, 1994
and July 31, 1994.
Item 6. Exhibits and Reports on Form 8-K.
(a) The exhibits filed as part of this report are listed on
the Index to Exhibits accompanying this report.
(b) Reports on Form 8-K. During the fiscal quarter ended
October 31, 1994, the Company filed one report on Form 8-K. Such
report, which was filed with the Securities and Exchange
Commission on August 15, 1994, included information in response
to Item 5. (Other Events) and Item 7. (Financial Statements, Pro
Forma Financial Information and Exhibits). The report did not
include any financial statements or pro forma financial
information.
SIGNATURES
Pursuant to the requirements of the Securities Exchange
Act of 1934, the Registrant has duly caused this report to be
signed on its behalf by the undersigned thereunto duly
authorized.
CIRCUS CIRCUS ENTERPRISES, INC.
(Registrant)
Date: December 13, 1994 By CLYDE T. TURNER
Clyde T. Turner
Chairman of the Board,
President and Chief Executive
Officer
Date: December 13, 1994 By DANIEL COPP
Daniel Copp
Executive Vice President,
Chief Financial Officer and
Treasurer
INDEX TO EXHIBITS
Exhibit
No. Description
4(a). First and Second Amendments to the $250 Million
Revolving Loan Agreement, by and among the Company, the
Banks named therein and Bank of America National Trust
and Savings Association, as managing agent for the
Banks.
4(b). First and Second Amendments to the $500 Million
Reducing Revolving Loan Agreement, by and among the
Company, the Banks named therein and Bank of America
National Trust and Savings Association, as managing
agent for the Banks.
27. Financial Data Schedule for the nine months ended
October 31, 1994 as required under EDGAR.
AMENDMENT NO. 1
(Revolving Loan Agreement)
Reference is made to that certain Revolving Loan
Agreement dated as of September 30, 1993 (the "Loan Agreement")
among Circus Circus Enterprises, Inc., The Long-Term Credit
Bank of Japan, Ltd., Los Angeles Agency, First Interstate Bank
of Nevada, N.A., Societe Generale, Credit Lyonnais Los Angeles
Branch and Credit Lyonnais Cayman Island Branch, all as Co-
Agents, CIBC Inc., as Co-Managing Agent, Bank of America
National Trust and Savings Association, as Managing Agent, and
the Banks therein named. Terms defined in the Loan Agreement
are used herein with the same meanings.
The parties hereto agree as follows:
1. Section 1.1. Section 1.1 of the Loan Agreement
is amended to restate the following defined terms set forth
therein to read as follows:
"'Competitive Advance' means an Advance made to
Borrower by any Bank not determined by that Bank's Pro-
Rata Share of the Commitment pursuant to Section 2.4 or
2.4A."
"'Competitive Advance Note' means (a) the promissory
note made by Borrower in favor of a Bank to evidence the
Competitive Advances made by that Bank substantially in
the form of Exhibit C, either as originally executed or as
the same may from time to time be supplemented, modified,
amended, renewed or extended and (b) any promissory note
made by Borrower in favor of a Bank to evidence a Foreign
Currency Advance made by that Bank pursuant to
Section 2.4A and delivered by Borrower to that Bank
pursuant to Section 2.4A(e)."
2. Section 1.1. Section 1.1 of the Loan Agreement
is further amended to restate clauses (a), (b), (c) and (d)
of the definition of "Deemed New Venture Indebtedness" therein
to read as follows:
" (a) where such Indebtedness is covered in whole or
in part by a Contingent Guaranty issued by Borrower and no
other owner (or Affiliate of any other owner) has issued a
similar Contingent Guaranty, in the amount of such
Indebtedness covered by the Contingent Guaranty:
(b) where such Indebtedness is covered in whole or
in part by a Contingent Guaranty issued by a Restricted
Subsidiary and no other owner (or Affiliate of any other
owner) has issued a similar Contingent Guaranty, in an
amount equal to the lesser of (i) the amount of such
Indebtedness covered by the Contingent Guaranty and
(ii) the aggregate Investment of Borrower and its
Restricted Subsidiaries in such Restricted Subsidiary;
(c) where such Indebtedness is covered in whole or
in part by a Contingent Guaranty issued by Borrower and
other owners (or Affiliates of such owners) have issued
similar Contingent Guaranties, in an amount equal to the
lesser of (i) the amount of such Indebtedness covered by
the Contingent Guaranty and (ii) the same proportion of
such Indebtedness as the proportionate direct or indirect
ownership interest of Borrower in such New Venture Entity;
(d) where such Indebtedness is covered in whole or
in part by a Contingent Guaranty issued by a Restricted
Subsidiary and other owners (or Affiliates of such owners)
have issued similar Contingent Guaranties, in an amount
equal to the lesser of (i) the lesser of (A) the amount of
such Indebtedness covered by the Contingent Guaranty and
(B) the same proportion of such Indebtedness as the pro-
portionate direct or indirect ownership interest of
Borrower in such New Venture Entity and (ii) the aggregate
Investment of Borrower and its Restricted Subsidiaries in
such Restricted Subsidiary;"
and to add the following after the proviso at the end of such
definition:
"and provided further, that the phrase "Indebtedness
covered by a Contingent Guaranty", or similar
phrasings, as used in the foregoing definition means
the portion of the Indebtedness guaranteed by the
Contingent Guaranty where the Contingent Guaranty
does not guarantee the entire Indebtedness."
3. Section 1.1. Section 1.1 of the Loan Agreement
is further amended to add the following sentence at the end of
the definition of "Contingent Guaranty" therein:
"The amount of any Contingent Guaranty consisting of
a Completion Guaranty shall be deemed to be zero
unless and until Borrower or any of its Restricted
Subsidiaries has determined, or in good faith should
determine based on all information then available to
it, that performance by Borrower or the Restricted
Subsidiary of its obligations under the Completion
Guaranty is at least reasonably possible and,
notwithstanding the preceding sentence, if such
performance is at least reasonably possible the
amount thereof shall, if not stated or determinable,
be deemed the reasonably anticipated liability in
respect thereof as determined by Borrower or the
Restricted Subsidiary in good faith."
4. Section 1.1. Section 1.1 of the Loan Agreement
is further amended to add the following new defined terms at
the appropriate alphabetical places:
"'Completion Guaranty' means a Contingent Guaranty
given by Borrower or a Restricted Subsidiary to a holder
of Indebtedness of, or an obligee of, a New Venture Entity
which obligates Borrower or the Restricted Subsidiary to
cause the completion of construction of a New Venture
and/or to provide funding for all or a portion of any
construction cost overruns with respect thereto."
"'Darling Casino Project' means the New Venture to be
located in Sydney, Australia known as the "Darling Casino
Project," as described in the written materials heretofore
furnished to the Banks."
"'Foreign Currency Advance' means a Competitive
Advance made in a currency other than Dollars."
"'Foreign Currency Base Rate' means, with respect to
any Foreign Currency Advance, the average of the interest
rates per annum (rounded upward, if necessary, to the next
1/16 of 1%) at which deposits in the applicable foreign
currency are offered by the Eurodollar Reference Banks to
prime banks in the Designated Eurodollar Market at or
about 11:00 a.m. local time in the Designated Eurodollar
Market, two (2) Eurodollar Banking Days before the date of
the Foreign Currency Advance in an aggregate amount
approximately equal to the amount of the Foreign Currency
Advance and for a period of time comparable to the number
of days to the maturity of the Foreign Currency Advance.
The determination of the Foreign Currency Base Rate by the
Managing Agent shall be conclusive in the absence of
manifest error."
"'Foreign Currency Equivalent' means, as of any date
of determination, the equivalent amount in Dollars of a
Foreign Currency Advance or a Foreign Currency Letter of
Credit, as the case may be, using the currency exchange
rate for such date in the New York City wholesale foreign
currency exchange market in trading among banks in amounts
of $1,000,000 or more, as reported in the Wall Street
Journal, or, if not so reported for such date, as
otherwise reasonably determined by the Managing Agent."
"'Foreign Currency Margin Bid' means a Competitive
Bid to make a Foreign Currency Advance on the basis of a
margin over the Foreign Currency Base Rate."
5. Section 2.1(a). Section 2.1(a) of the Loan
Agreement is amended by restating clause (ii) thereof to read
as follows:
"(ii) do not result in the aggregate principal amount
outstanding under the Notes exceeding the then applicable
Commitment (with the aggregate principal amount
outstanding under the Notes, to the extent consisting of
Foreign Currency Advances, respectively, being based on
the Foreign Currency Equivalent thereof as of the Banking
Day immediately preceding the date of the Request for
Loan)."
6. Section 2.4(a). Section 2.4(a) of the Loan
Agreement is amended by restating clause (ii) thereof to read
as follows:
"(ii) evidenced by the Notes being in excess of the
then applicable Commitment (with the aggregate principal
amount outstanding under the Notes, to the extent
consisting of Foreign Currency Advances being based on the
Foreign Currency Equivalent thereof as of the Banking Day
immediately preceding the date of the Competitive Bid
Request)."
7. Section 2.4A. A new Section 2.4A is added to
the Loan Agreement to read as follows:
"2.4A Foreign Currency Advances.
(a) Borrower may request, and any Bank may make
(in its sole and absolute discretion), a Competitive
Advance consisting of a Foreign Currency Advance.
Except as otherwise provided in this Section 2.4A,
Foreign Currency Advances shall be governed by
Section 2.4 just as any other Competitive Advance.
(b) The Competitive Bid Request for a Foreign
Currency Advance shall state the foreign currency in
which such Foreign Currency Advance is to be made.
Any such Competitive Bid Request must be made for a
Foreign Currency Advance of at least the Foreign
Currency Equivalent at the time of such request of
$5,000,000, but may be any amount in excess thereof.
(c) If a Competitive Advance is a Foreign
Currency Advance, all references in Section 2.4 to
(i) "Eurodollar Margin Bids" shall be deemed
references to "Foreign Currency Margin Bids" and (ii)
"Eurodollar Base Rate" shall be deemed references to
"Foreign Currency Base Rate."
(d) Any Foreign Currency Advance and any
interest payable with respect thereto shall be
payable in the same foreign currency as the Foreign
Currency Advance was made.
(e) Any Bank making a Foreign Currency Advance
may, at its option, require as a condition thereto
that Borrower issue in favor of such Bank a separate
promissory note substantially in the form of
Exhibit C (but denominated in the foreign currency)
to evidence such Foreign Currency Advance. If the
Bank does not so require, the Foreign Currency
Advance shall be evidenced by that Bank's Competitive
Advance Note delivered at the Closing Date with the
references therein to "Dollars" being deemed
references to such foreign currency.
8. Section 3.1. Section 3.1 of the Loan Agreement
is amended by restating clause (f)(iii) thereof to read as
follows:
"(iii) the amount, if any, by which the
principal outstanding Indebtedness evidenced by
the Notes at any time exceeds the Commitment
shall be payable immediately, and shall be
applied to the Committed Advance Notes (with the
aggregate principal amount outstanding under the
Notes to the extent consisting of Foreign
Currency Advances being based on the Foreign
Currency Equivalent thereof as of the last
Banking Day in each calendar month); and"
9. Section 6.9. Section 6.9 of the Loan Agreement
is amended by adding a new clause (j) to read as follows:
"(j) a Negative Pledge on the shares of capital
stock or other evidence of an Investment owned by Borrower
or any of its Restricted Subsidiaries in the New Venture
Entity that owns the Darling Casino Project, or in any
Person that manages or operates such New Venture Entity,
in favor of any lender to such New Venture Entity;"
10. Section 6.16. The Majority Banks hereby
consent, pursuant to Section 6.16(a), to the making of New
Venture Investments in the New Venture Entity that owns the
Darling Casino Project, provided that the aggregate New Venture
Capital Expenditures and New Venture Investments with respect
to such New Venture do not exceed $275,000,000.
11. Exhibits. Exhibits D and E to the Loan
Agreement are amended to be in the forms attached to this
Amendment.
12. Conditions Precedent. This Amendment shall
become effective on May 6, 1994, provided that on or before
such date the following conditions precedent have been
satisfied:
(a) The Managing Agent shall have received executed
counterparts of this Amendment from Borrower and Banks
comprising at least the Majority Banks; and
(b) The Managing Agent shall have received from each
obligor under the Subsidiary Guaranty its written consent
to this Amendment, in form and substance satisfactory to
the Managing Agent.
13. Counterparts. This Amendment may be executed in
counterparts in accordance with Section 11.7 of the Loan
Agreement.
14. Confirmation. In all other respects, the Loan
Agreement is confirmed.
This Amendment is dated as of May 6, 1994.
CIRCUS CIRCUS ENTERPRISES, INC.
By: __________/s/_____________
Its:______________________
BANK OF AMERICA NATIONAL TRUST and
SAVINGS ASSOCIATION, as Managing
Agent
By: __________/s/_____________
Its:______________________
BANK OF AMERICA NATIONAL TRUST and
SAVINGS ASSOCIATION, as a Bank
By: __________/s/_____________
Its:______________________
CIBC, INC, as Co-Managing Agent and
as a Bank
By: __________/s/_____________
Its:______________________
THE LONG-TERM CREDIT BANK OF JAPAN,
LTD., LOS ANGELES AGENCY, as Co-Agent
and a Bank
By: __________/s/_____________
Its:______________________
FIRST INTERSTATE BANK OF NEVADA,
N.A., as Co-Agent and a Bank
By: __________/s/_____________
Its:______________________
SOCIETE GENERALE, as Co-Agent and a
Bank
By: __________/s/_____________
Its:______________________
CREDIT LYONNAIS CAYMAN ISLAND BRANCH,
as Co-Agent and a Bank
By: __________/s/_____________
Its:______________________
CREDIT LYONNAIS LOS ANGELES BRANCH,
as Co-Agent and a Bank
By: __________/s/_____________
Its:______________________
CONTINENTAL BANK N.A., as a Bank
By: __________/s/_____________
Its:______________________
WESTDEUTSCHE LANDESBANK GIROZENTRALE,
NEW YORK AND CAYMAN ISLANDS BRANCHES
By: __________/s/_____________
Its:______________________
THE MITSUBISHI TRUST AND BANKING
CORP., LOS ANGELES AGENCY, as a Bank
By: __________/s/_____________
Its:______________________
THE SUMITOMO BANK, LIMITED, LOS
ANGELES BRANCH, as a Bank
By: __________/s/_____________
Its:______________________
THE TOKAI BANK, LTD., LOS ANGELES
AGENCY, as a Bank
By: __________/s/_____________
Its:______________________
UNITED STATES NATIONAL BANK OF
OREGON, as a Bank
By: __________/s/_____________
Its:______________________
THE INDUSTRIAL BANK OF JAPAN LIMITED,
LOS ANGELES AGENCY, as a Bank
By: __________/s/_____________
Its:______________________
MIDLANTIC NATIONAL BANK, as a Bank
By: __________/s/_____________
Its:______________________
THE NIPPON CREDIT BANK, LTD.,
LOS ANGELES AGENCY, as a Bank
By: __________/s/_____________
Its:______________________
THE YASUDA TRUST & BANKING CO., LTD.,
LOS ANGELES AGENCY, as a Bank
By: __________/s/_____________
Its:______________________
BANK OF AMERICA NEVADA, as a Bank
By: __________/s/_____________
Its:______________________
NATIONSBANK OF TEXAS, N.A.,as a Bank
By: __________/s/_____________
Its:______________________
AMENDMENT NO. 2
(Revolving Loan Agreement)
Reference is made to that certain Revolving Loan
Agreement dated as of September 30, 1993 (the "Loan
Agreement") among Circus Circus Enterprises, Inc., The Long-
Term Credit Bank of Japan, Ltd., Los Angeles Agency, First
Interstate Bank of Nevada, N.A., Societe Generale, Credit
Lyonnais Los Angeles Branch and Credit Lyonnais Cayman Island
Branch, all as Co Agents, CIBC Inc., as Co-Managing Agent,
Bank of America National Trust and Savings Association, as
Managing Agent, and the Banks therein named, as amended by
Amendment No. 1 dated May 6, 1994. Terms defined in the Loan
Agreement are used herein with the same meanings.
The parties hereto agree as follows:
1. Section 1.1. Section l.1 of the Loan
Agreement is amended to restate the following defined terms
set forth therein to read as follows:
"Disposition" means the sale, transfer or other
disposition of any asset of Borrower or any of its Restricted
Subsidiaries other than (i) inventory or other assets sold or
otherwise disposed of in the ordinary course of business of
Borrower or a Restricted Subsidiary, (ii) equipment sold or
otherwise disposed of where substantially similar equipment
in replacement thereof has theretofore been acquired, or
thereafter within 90 days is acquired, by Borrower or a
Restricted Subsidiary, (iii) a disposition to Borrower or a
Restricted Subsidiary or to a New Venture Entity in
connection with a New Venture Investment, and (iv) a
disposition of Property acquired by the Borrower or any of
its Restricted Subsidiaries as, or as part of, a New Venture,
where such disposition is made pursuant to an obligation to
sell or a right to purchase such Property, which obligation
or right was created substantially concurrently with the
acquisition of such Property or the formation of the New
Venture Entity.
"Negative Pledge" means a Contractual Obligation
that contains a covenant binding on Borrower or any of its
Restricted Subsidiaries that prohibits Liens on any of its
Restricted Subsidiaries that prohibits Liens on any of its or
their Property, other than (a) any such covenant contained in
a Contractual Obligation granting a Lien permitted under
Section 6.9 which affects only the Property that is the
subject of such permitted Lien, (b) any such covenant that
does not apply to Liens securing the Obligations, and (c) any
such covenant that applies only to a New Venture Investment
of Borrower or any of its Restricted Subsidiaries or to the
Property of the corresponding New Venture Entity.
2. Section 6.9. Section 6.9 of the Loan
Agreement is amended by restating clause (j) set forth
therein (pursuant to Amendment No.1 dated as of May 6, 1994)
to read as follows:
"(j) a Negative Pledge on the shares of capital
stock (or other evidence of an Investment) owned by
Borrower or any of its Restricted Subsidiaries in any
New Venture Entity or in any Restricted Subsidiary that
manages or operates such New Venture Entity, in favor
of any lender to such New Venture Entity;"
3. Counterparts. This Amendment may be executed
in counterparts in accordance with Section 11.7 of the Loan
Agreement.
4. Confirmation. In all other respects, the Loan
Agreement is confirmed.
This Amendment is dated as of August 4, 1994.
CIRCUS CIRCUS ENTERPRISES, INC.
By:__________/s/_____________
Its:_________________________
BANK OF AMERICA NATIONAL TRUST
SAVINGS ASSOCIATION, as Managing
Agent.
By:__________/s/______________
Its:__________________________
BANK OF AMERICA NATIONAL TRUST and
SAVINGS ASSOCIATION, as a Bank
By:__________/s/______________
Its:__________________________
CIBC, INC, as Co-Managing Agent and
as a Bank
By:__________/s/______________
Its:__________________________
THE LONG-TERM CREDIT BANK OF JAPAN,
LTD., LOS ANGELES AGENCY, as Co-
Agent and a Bank
By:__________/s/______________
Its:__________________________
FIRST INTERSTATE BANK OF NEVADA,
N.A., as Co-Agent and a Bank
By:__________/s/______________
Its:__________________________
SOCIETE GENERALE, as Co-Agent and a
Bank
By:__________/s/______________
Its:__________________________
CREDIT LYONNAIS CAYMAN ISLAND
BRANCH, as Co-Agent and a Bank
By:__________/s/______________
Its:__________________________
CREDIT LYONNAIS LOS ANGELES BRANCH,
as Co-Agent and a Bank
By:__________/s/______________
Its:__________________________
CONTINENTAL BANK N.A., as a Bank
By:__________/s/______________
Its:__________________________
WESTDEUTSCHE LANDESBANK
GIROZENTRALE, NEW YORK AND
CAYMAN ISLANDS BRANCHES
By:__________/s/______________
Its:__________________________
THE MITSUBISHI TRUST AND BANKING
CORP., LOS ANGELES AGENCY, as a
Bank
By:__________/s/______________
Its:__________________________
THE SUMITOMO BANK, LIMITED, LOS
ANGELES BRANCH, as a Bank
By:__________/s/______________
Its:__________________________
THE TOKAI BANK, LTD., LOS ANGELES
AGENCY, as a Bank
By:__________/s/______________
Its:__________________________
UNITED STATES NATIONAL BANK OF
OREGON, as a Bank
By:__________/s/______________
Its:__________________________
THE INDUSTRIAL BANK OF JAPAN
LIMITED, LOS ANGELES AGENCY, as a
Bank
By:__________/s/______________
Its:__________________________
MIDLANTIC NATIONAL BANK, as a
Bank
By:__________/s/______________
Its:__________________________
THE NIPPON CREDIT BANK, LTD.,
LOS ANGELES AGENCY, as a Bank
By:__________/s/______________
Its:__________________________
THE YASUDA TRUST & BANKING CO.,
LTD., LOS ANGELES AGENCY, as a Bank
By:__________/s/______________
Its:__________________________
BANK OF AMERICA NEVADA, as a
Bank
By:__________/s/______________
Its:__________________________
NATIONSBANK OF TEXAS, N.A.,as a
Bank
By:__________/s/______________
Its:__________________________
AMENDMENT NO. 1
(Reducing Revolving Loan Agreement)
Reference is made to that certain Reducing Revolving
Loan Agreement dated as of September 30, 1993 (the "Loan
Agreement") among Circus Circus Enterprises, Inc., The Long-
Term Credit Bank of Japan, Ltd., Los Angeles Agency, First
Interstate Bank of Nevada, N.A., Societe Generale, Credit
Lyonnais Los Angeles Branch and Credit Lyonnais Cayman Island
Branch, all as Co-Agents, CIBC Inc., as Co-Managing Agent, Bank
of America National Trust and Savings Association, as Managing
Agent, and the Banks therein named. Terms defined in the Loan
Agreement are used herein with the same meanings.
The parties hereto agree as follows:
1. Section 1.1. Section 1.1 of the Loan Agreement
is amended to restate the following defined terms set forth
therein to read as follows:
"'Competitive Advance' means an Advance made to
Borrower by any Bank not determined by that Bank's Pro-
Rata Share of the Commitment pursuant to Section 2.4 or
2.4A."
"'Competitive Advance Note' means (a) the promissory
note made by Borrower in favor of a Bank to evidence the
Competitive Advances made by that Bank substantially in
the form of Exhibit C, either as originally executed or as
the same may from time to time be supplemented, modified,
amended, renewed or extended and (b) any promissory note
made by Borrower in favor of a Bank to evidence a Foreign
Currency Advance made by that Bank pursuant to
Section 2.4A and delivered by Borrower to that Bank
pursuant to Section 2.4A(e)."
"'Loan Documents' means, collectively, this
Agreement, the Notes, the Subsidiary Guaranty, the Letters
of Credit, any Request for Loan, any Request for Letter of
Credit, any Competitive Bid Request, any Compliance
Certificate and any other agreements of any type or nature
hereafter executed and delivered by Borrower or any of its
Subsidiaries or Affiliates to the Managing Agent or to any
Bank in any way relating to or in furtherance of this
Agreement (but excluding the Other Loan Documents), in
each case either as originally executed or as the same may
from time to time be supplemented, modified, amended,
restated, extended or supplanted."
2. Section 1.1. Section 1.1 of the Loan Agreement
is further amended to restate clauses (a), (b), (c) and (d)
of the definition of "Deemed New Venture Indebtedness" therein
to read as follows:
" (a) where such Indebtedness is covered in whole or
in part by a Contingent Guaranty issued by Borrower and no
other owner (or Affiliate of any other owner) has issued a
similar Contingent Guaranty, in the amount of such
Indebtedness covered by the Congingent Guaranty:
(b) where such Indebtedness is covered in whole or
in part by a Contingent Guaranty issued by a Restricted
Subsidiary and no other owner (or Affiliate of any other
owner) has issued a similar Contingent Guaranty, in an
amount equal to the lesser of (i) the amount of such
Indebtedness covered by the Contingent Guaranty and
(ii) the aggregate Investment of Borrower and its
Restricted Subsidiaries in such Restricted Subsidiary;
(c) where such Indebtedness is covered in whole or
in part by a Contingent Guaranty issued by Borrower and
other owners (or Affiliates of such owners) have issued
similar Contingent Guaranties, in an amount equal to the
lesser of (i) the amount of such Indebtedness covered by
the Contingent Guaranty and (ii) the same proportion of
such Indebtedness as the proportionate direct or indirect
ownership interest of Borrower in such New Venture Entity;
(d) where such Indebtedness is covered in whole or
in part by a Contingent Guaranty issued by a Restricted
Subsidiary and other owners (or Affiliates of such owners)
have issued similar Contingent Guaranties, in an amount
equal to the lesser of (i) the lesser of (A) the amount of
such Indebtedness covered by the Contingent Guaranty and
(B) the same proportion of such Indebtedness as the pro-
portionate direct or indirect ownership interest of
Borrower in such New Venture Entity and (ii) the aggregate
Investment of Borrower and its Restricted Subsidiaries in
such Restricted Subsidiary;"
and to add the following after the proviso at the end of such
definition:
"and provided further, that the phrase "Indebtedness
covered by a Contingent Guaranty", or similar
phrasings, as used in the foregoing definition means
the portion of the Indebtedness guaranteed by the
Contingent Guaranty where the Contingent Guaranty
does not guarantee the entire Indebtedness."
3. Section 1.1. Section 1.1 of the Loan Agreement
is further amended to add the following sentence at the end of
the definition of "Contingent Guaranty" therein:
"The amount of any Contingent Guaranty consisting of
a Completion Guaranty shall be deemed to be zero
unless and until Borrower or any of its Restricted
Subsidiaries has determined, or in good faith should
determine based on all information then available to
it, that performance by Borrower or the Restricted
Subsidiary of its obligations under the Completion
Guaranty is at least reasonably possible and,
notwithstanding the preceding sentence, if such
performance is at least reasonably possible the
amount thereof shall, if not stated or determinable,
be deemed the reasonably anticipated liability in
respect thereof as determined by Borrower or the
Restricted Subsidiary in good faith."
4. Section 1.1. Section 1.1 of the Loan Agreement
is further amended to add the following new defined terms at
the appropriate alphabetical places:
"'Aggregate Effective Amount' means, as of any date
of determination and with respect to Letters of Credit
then outstanding, the sum of (a) the aggregate effective
face amounts of all such Letters of Credit not then paid
by the Issuing Bank plus (b) the aggregate amounts paid by
the Issuing Bank under such Letters of Credit not then
reimbursed to the Issuing Bank by Borrower pursuant to
Section 2.10(d) and not the subject of Committed Advances
made pursuant to Section 2.10(e). With respect to any
Foreign Currency Letter of Credit, such amounts shall be
the Foreign Currency Equivalent thereof.
"'Applicable Letter of Credit Fee' means, for each
Pricing Period, the per annum rate set forth as the
interest rate margin in the definition of "Applicable
Eurodollar Rate Margin" opposite the Applicable Pricing
Level for that Pricing Period."
"'Completion Guaranty' means a Contingent Guaranty
given by Borrower or a Restricted Subsidiary to a holder
of Indebtedness of, or an obligee of, a New Venture Entity
which obligates Borrower or the Restricted Subsidiary to
cause the completion of construction of a New Venture
and/or to provide funding for all or a portion of any
construction cost overruns with respect thereto."
"'Darling Casino Project' means the New Venture to be
located in Sydney, Australia known as the "Darling Casino
Project," as described in the written materials heretofore
furnished to the Banks."
"'Foreign Currency Advance' means a Competitive
Advance made in a currency other than Dollars."
"'Foreign Currency Base Rate' means, with respect to
any Foreign Currency Advance, the average of the interest
rates per annum (rounded upward, if necessary, to the next
1/16 of 1%) at which deposits in the applicable foreign
currency are offered by the Eurodollar Reference Banks to
prime banks in the Designated Eurodollar Market at or
about 11:00 a.m. local time in the Designated Eurodollar
Market, two (2) Eurodollar Banking Days before the date of
the Foreign Currency Advance in an aggregate amount
approximately equal to the amount of the Foreign Currency
Advance and for a period of time comparable to the number
of days to the maturity of the Foreign Currency Advance.
The determination of the Foreign Currency Base Rate by the
Managing Agent shall be conclusive in the absence of
manifest error."
"'Foreign Currency Equivalent' means, as of any date
of determination, the equivalent amount in Dollars of a
Foreign Currency Advance or a Foreign Currency Letter of
Credit, as the case may be, using the currency exchange
rate for such date in the New York City wholesale foreign
currency exchange market in trading among banks in amounts
of $1,000,000 or more, as reported in the Wall Street
Journal, or, if not so reported for such date, as
otherwise reasonably determined by the Managing Agent."
"'Foreign Currency Letter of Credit' means a Letter
of Credit denominated in a currency other than Dollars."
"'Foreign Currency Margin Bid' means a Competitive
Bid to make a Foreign Currency Advance on the basis of a
margin over the Foreign Currency Base Rate."
"'Issuing Bank' means Bank of America National Trust
and Savings Association, or any other Bank selected by
Borrower (with the consent of that Bank) to be the issuing
bank for Letters of Credit."
"'Letters of Credit' means any of the standby letters
of credit issued by the Issuing Bank under the Commitment
pursuant to Section 2.10, either as originally issued or
as the same may be supplemented, modified, amended,
renewed, extended or supplanted."
"'Request for Letter of Credit' means a written
request for a Letter of Credit substantially in the form
of Exhibit J, signed by a Responsible Official of
Borrower, on behalf of Borrower, and properly completed to
provide all information required to be included therein."
5. Section 2.1(a). Section 2.1(a) of the Loan
Agreement is amended by restating clause (ii) thereof to read
as follows:
"(ii) do not result in the sum of (A) the aggregate
principal amount outstanding under the Notes plus (B) the
Aggregate Effective Amount exceeding the then applicable
Commitment (with the aggregate principal amount
outstanding under the Notes and the Aggregate Effective
Amount, to the extent consisting of Foreign Currency
Advances and Foreign Currency Letters of Credit,
respectively, being based on the Foreign Currency
Equivalents thereof as of the Banking Day immediately
preceding the date of the Request for Loan)."
6. Section 2.4(a). Section 2.4(a) of the Loan
Agreement is amended by restating clause (ii) thereof to read
as follows:
"(ii) evidenced by the Notes plus the Aggregate
Effective Amount being in excess of the then applicable
Commitment (with the aggregate principal amount
outstanding under the Notes and the Aggregate Effective
Amount, to the extent consisting of Foreign Currency
Advances and Foreign Currency Letters of Credit,
respectively, being based on the Foreign Currency
Equivalents thereof as of the Banking Day immediately
preceding the date of the Competitive Bid Request)."
7. Section 2.4A. A new Section 2.4A is added to
the Loan Agreement to read as follows:
"2.4A Foreign Currency Advances.
(a) Borrower may request, and any Bank may make
(in its sole and absolute discretion), a Competitive
Advance consisting of a Foreign Currency Advance.
Except as otherwise provided in this Section 2.4A,
Foreign Currency Advances shall be governed by
Section 2.4 just as any other Competitive Advance.
(b) The Competitive Bid Request for a Foreign
Currency Advance shall state the foreign currency in
which such Foreign Currency Advance is to be made.
Any such Competitive Bid Request must be made for a
Foreign Currency Advance of at least the Foreign
Currency Equivalent at the time of such request of
$5,000,000, but may be any amount in excess thereof.
(c) If a Competitive Advance is a Foreign
Currency Advance, all references in Section 2.4 to
(i) "Eurodollar Margin Bids" shall be deemed
references to "Foreign Currency Margin Bids" and (ii)
"Eurodollar Base Rate" shall be deemed references to
"Foreign Currency Base Rate."
(d) Any Foreign Currency Advance and any
interest payable with respect thereto shall be
payable in the same foreign currency as the Foreign
Currency Advance was made.
(e) Any Bank making a Foreign Currency Advance
may, at its option, require as a condition thereto
that Borrower issue in favor of such Bank a separate
promissory note substantially in the form of
Exhibit C (but denominated in the foreign currency)
to evidence such Foreign Currency Advance. If the
Bank does not so require, the Foreign Currency
Advance shall be evidenced by that Bank's Competitive
Advance Note delivered at the Closing Date with the
references therein to "Dollars" being deemed
references to such foreign currency.
8. Section 2.10. A new Section 2.10 is added to
the Loan Agreement to read as follows:
"2.10 Letters of Credit.
(a) Subject to the terms and conditions hereof,
at any time and from time to time from the Closing Date
through the Maturity Date, the Issuing Bank shall issue
such Letters of Credit under the Commitment as Borrower
may request by a Request for Letter of Credit; provided
that (i) giving effect to all such Letters of Credit, the
sum of (A) the aggregate principal amount outstanding
under the Notes plus (B) the Aggregate Effective Amount
does not exceed the then applicable Commitment, (ii) the
Aggregate Effective Amount under all outstanding Letters
of Credit shall not exceed $200,000,000 and (iii) with
respect to a Request for a Foreign Currency Letter of
Credit, the Issuing Bank shall not be obligated to issue
the Foreign Currency Letter of Credit if and so long as
the Issuing Bank determines that foreign currency market
circumstances make it unlawful, impossible or impractica-
ble for the Issuing Bank to fund or hedge its obligations
under the Foreign Currency Letter of Credit. For purposes
of the foregoing, the aggregate principal amount
outstanding under the Notes and the Aggregate Effective
Amount, to the extent consisting of Foreign Currency
Advances and Foreign Currency Letters of Credit,
respectively, shall be based on the Foreign Currency
Equivalents thereof as of the Banking Day immediately
preceding the date of the Request for Letter of Credit.
Each Letter of Credit shall be in a form reasonably
acceptable to the Issuing Bank. Unless all the Banks
otherwise consent in a writing delivered to the Managing
Agent, the term of any Letter of Credit shall not extend
beyond the Maturity Date. A Request for Letter of Credit
shall be irrevocable absent the consent of the Issuing
Bank.
(b) Each Request for Letter of Credit shall be
submitted to the Issuing Bank, with a copy to the Managing
Agent, at least five (5) Banking Days prior to the date
upon which the related Letter of Credit is proposed to be
issued. The Managing Agent shall promptly notify the
Issuing Bank whether such Request for Letter of Credit,
and the issuance of a Letter of Credit pursuant thereto,
conforms to the requirements of this Agreement. Upon
issuance of a Letter of Credit, the Issuing Bank shall
promptly notify the Managing Agent, and the Managing Agent
shall promptly notify the Banks, of the amount and terms
thereof.
(c) Upon the issuance of a Letter of Credit,
each Bank shall be deemed to have purchased a pro rata
participation in such Letter of Credit from the Issuing
Bank in an amount equal to that Bank's Pro Rata Share of
the Commitment. Without limiting the scope and nature of
each Bank's participation in any Letter of Credit, to the
extent that the Issuing Bank has not been reimbursed by
Borrower for any payment required to be made by the
Issuing Bank under any Letter of Credit, each Bank shall,
pro rata according to its Pro Rata Share of the
Commitment, reimburse the Issuing Bank through the
Managing Agent promptly upon demand for the amount of such
payment. The obligation of each Bank to so reimburse the
Issuing Bank shall be absolute and unconditional and shall
not be affected by the occurrence of an Event of Default
or any other occurrence or event. Any such reimbursement
shall not relieve or otherwise impair the obligation of
Borrower to reimburse the Issuing Bank for the amount of
any payment made by the Issuing Bank under any Letter of
Credit together with interest as hereinafter provided.
(d) Borrower agrees to pay to the Issuing Bank
through the Managing Agent an amount equal to any payment
made by the Issuing Bank with respect to each Letter of
Credit within one (1) Banking Day after demand made by the
Issuing Bank therefor, together with interest on such
amount from the date of any payment made by the Issuing
Bank at the Default Rate. The principal amount of any
such payment shall be used to reimburse the Issuing Bank
for the payment made by it under the Letter of Credit.
Each Bank that has reimbursed the Issuing Bank pursuant to
Section 2.10(c) for its Pro-Rata Share of any payment made
by the Issuing Bank under a Letter of Credit shall
thereupon acquire a pro-rata participation, to the extent
of such reimbursement, in the claim of the Issuing Bank
against Borrower under this Section 2.10(d) and shall
share, in accordance with that pro-rata participation, in
any payment made by Borrower with respect to such claim.
(e) If Borrower fails to make the payment
required by Section 2.10(d) within the time period therein
set forth, in lieu of the reimbursement to the Issuing
Bank under Section 2.10(c) the Issuing Bank may (but is
not required to) without notice to or the consent of
Borrower, instruct the Managing Agent to cause Committed
Advances to be made by the Banks under the Commitment in
an aggregate amount equal to the amount paid by the
Issuing Bank with respect to that Letter of Credit and,
for this purpose, the conditions precedent set forth in
Article 8 shall not apply. The proceeds of such Advances
shall be paid to the Issuing Bank to reimburse it for the
payment made by it under the Letter of Credit. Such
Advances shall be payable upon demand and shall bear
interest at the Default Rate.
(f) With respect to any Foreign Currency Letter
of Credit, all payment obligations under subsections (c),
(d), and (e) shall be payable in Dollars based on the
Foreign Currency Equivalent as of the date the obligation
arises.
(g) The issuance of any supplement,
modification, amendment, renewal, or extension to or of
any Letter of Credit shall be treated in all respects the
same as the issuance of a new Letter of Credit.
(h) The obligation of Borrower to pay to the
Issuing Bank the amount of any payment made by the Issuing
Bank under any Letter of Credit shall be absolute,
unconditional, and irrevocable, subject only to
performance by the Issuing Bank of its obligations to
Borrower under Nevada Revised Statutes Section 104.5109.
Without limiting the foregoing, Borrower's obligations
shall not be affected by any of the following
circumstances:
(i) any lack of validity or enforceability of
the Letter of Credit, this Agreement, or any other
agreement or instrument relating thereto;
(ii) any amendment or waiver of or any consent
to departure from the Letter of Credit, this Agree-
ment, or any other agreement or instrument relating
thereto, with the consent of Borrower;
(iii) the existence of any claim, setoff,
defense, or other rights which Borrower may have at
any time against the Issuing Bank, the Managing Agent
or any Bank, any beneficiary of the Letter of Credit
(or any persons or entities for whom any such
beneficiary may be acting) or any other Person,
whether in connection with the Letter of Credit, this
Agreement, or any other agreement or instrument
relating thereto, or any unrelated transactions;
(iv) any demand, statement, or any other docu-
ment presented under the Letter of Credit proving to
be forged, fraudulent, invalid, or insufficient in
any respect or any statement therein being untrue or
inaccurate in any respect whatsoever so long as any
such document appeared to comply with the terms of
the Letter of Credit;
(v) payment by the Issuing Bank in good faith
under the Letter of Credit against presentation of a
draft or any accompanying document which does not
strictly comply with the terms of the Letter of
Credit;
(vi) the existence, character, quality,
quantity, condition, packing, value or delivery of
any property purported to be represented by documents
presented in connection with any Letter of Credit or
for any difference between any such property and the
character, quality, quantity, condition, or value of
such property as described in such documents;
(vii) the time, place, manner, order or contents
of shipments or deliveries of property as described
in documents presented in connection with any Letter
of Credit or the existence, nature and extent of any
insurance relative thereto;
(viii) the solvency or financial responsibility of
any party issuing any documents in connection with a
Letter of Credit;
(ix) any failure or delay in notice of shipments
or arrival of any property;
(x) any error in the transmission of any
message relating to a Letter of Credit not caused by
the Issuing Bank, or any delay or interruption in any
such message;
(xi) any error, neglect or default of any
correspondent of the Issuing Bank in connection with
a Letter of Credit;
(xii) any consequence arising from acts of God,
war, insurrection, civil unrest, disturbances, labor
disputes, emergency conditions or other causes beyond
the control of the Issuing Bank;
(xiii) so long as the Issuing Bank in good faith
determines that the contract or document appears to
comply with the terms of the Letter of Credit, the
form, accuracy, genuineness or legal effect of any
contract or document referred to in any document
submitted to the Issuing Bank in connection with a
Letter of Credit; and
(xiv) where the Issuing Bank has acted in good
faith and observed general banking usage, any other
circumstances whatsoever.
(i) The Issuing Bank shall be entitled to the
protection accorded to the Managing Agent pursuant to
Section 10.6, mutatis mutandis.
(j) The Uniform Code of Practice for
Documentary Credits, as published in its most current
version by the International Chamber of Commerce, shall be
deemed a part of this Section and shall apply to all
Letters of Credit to the extent not inconsistent with
applicable Law.
(k) Concurrently with the issuance of each
Letter of Credit, Borrower shall pay a letter of credit
issuance fee to the Issuing Bank, for the sole account of
the Issuing Bank, in an amount to be set forth in a letter
agreement between Borrower and the Issuing Bank. Borrower
shall also pay to the Managing Agent for the ratable
account of the Banks in accordance with their Pro Rata
Share of the Commitment, a standby letter of credit fee in
an amount equal to the Applicable Letter of Credit Fee
times the face amount of such Letter of Credit, which fee
shall be payable quarterly in advance on the date of
issuance of the Letter of Credit and on each Quarterly
Payment Date thereafter through the termination or
expiration of such Letter of Credit. All fees with
respect to a Foreign Currency Letter of Credit shall be
payable in Dollars based on the Foreign Currency
Equivalent, as of the Banking Day immediately preceding
the Quarterly Payment Date or such termination or
expiration, of such Foreign Currency Letter of Credit.
The Managing Agent shall promptly make available to the
Banks in immediately available funds, pro-rata according
to their Pro Rata Share of the Commitment, the standby
letter of credit fees which are for the account of the
Banks. Borrower shall also pay transfer, issuance, check
fees, foreign currency exchange fees and costs, and such
other fees as the Issuing Bank normally charges (not to
include origination fees) in connection with standby
letters of credit and activity pursuant thereto, which
fees shall be solely for the account of the Issuing Bank."
9. Section 3.1. Section 3.1 of the Loan Agreement
is amended by restating clause (f)(iii) thereof to read as
follows:
"(iii) the amount, if any, by which the sum of
(A) the principal outstanding Indebtedness
evidenced by the Notes plus (B) the Aggregate
Effective Amount at any time exceeds the
Commitment shall be payable immediately, and
shall be applied to the Committed Advance Notes
(with the aggregate principal amount outstanding
under the Notes and Aggregate Effective Amount,
to the extent consisting of Foreign Currency
Advances and Foreign Currency Letters of Credit,
respectively, being based on the Foreign
Currency Equivalents thereof as of the last
Banking Day in each calendar month); and"
10. Section 3.4. Section 3.4 of the Loan Agreement
is amended to read as follows:
"3.4 Commitment Fees. From the Closing Date,
Borrower shall pay to the Managing Agent, for the
respective accounts of the Banks, pro rata according to
their Pro Rata Share of the Commitment, a commitment fee
equal to the Applicable Commitment Fee Rate per annum
times the average daily amount by which the Commitment
exceeds the sum of (a) the aggregate principal
Indebtedness evidenced by the Committed Advance Notes plus
(b) the Aggregate Effective Amount under all outstanding
Letters of Credit. The commitment fee shall be payable
quarterly in arrears on each Quarterly Payment Date and on
the Maturity Date. With respect to any Foreign Currency
Letter of Credit, the daily Aggregate Effective Amount
shall be determined for this purpose for each calendar
month of such quarterly period based on the Foreign
Currency Equivalents thereof as of the last Banking Day in
each such calendar month."
11. Section 6.9. Section 6.9 of the Loan Agreement
is amended by adding a new clause (j) to read as follows:
"(j) a Negative Pledge on the shares of capital
stock or other evidence of an Investment owned by Borrower
or any of its Restricted Subsidiaries in the New Venture
Entity that owns the Darling Casino Project, or in any
Person that manages or operates such New Venture Entity,
in favor of any lender to such New Venture Entity;"
12. Section 6.16. The Majority Banks hereby
consent, pursuant to Section 6.16(a), to the making of New
Venture Investments in the New Venture Entity that owns the
Darling Casino Project, provided that the aggregate New Venture
Capital Expenditures and New Venture Investments with respect
to such New Venture do not exceed $275,000,000.
13. Section 8.2. Section 8.2 of the Loan Agreement
is amended as follows;
(a) The introductory portion thereof is amended to
add the words "and the obligation of the Issuing Bank to
issue a Letter of Credit" after the comma following the
word "Advance" in the fifth line; and
(b) Clause (c) thereof is amended to add at the end
thereof the words "and the Issuing Bank shall, in the case
of a Letter of Credit, have received a Request for Letter
of Credit in compliance with Article 2."
14. Section 9.1. Section 9.1 of the Loan Agreement
is amended by adding at the end of clause (a) thereof the
following:
"or (iii) fails to pay to the Issuing Bank the amount
drawn under any Letter of Credit as required under
Section 2.10(d); or"
15. Section 9.2. Section 9.2 of the Loan Agreement
is amended as follows:
(a) Clause (a)(2) is renumbered as clause (a)(3)
and a new clause (a)(2) is added to read as follows:
"(2) the Issuing Bank may, with the approval of
the Managing Agent on behalf of the Majority Banks,
demand immediate payment by Borrower of an amount
equal to the aggregate amount of all outstanding
Letters of Credit to be held by the Issuing Bank in
an interest-bearing cash collateral account as
collateral hereunder; and"
(b) Clause (b)(2) is renumbered as clause (b)(3) and
a new clause (b)(2) is added to read as follows:
"(2) an amount equal to the aggregate amount of
all outstanding Letters of Credit shall be
immediately due and payable to the Issuing Bank
without notice to or demand upon Borrower, which are
expressly waived by Borrower, to be held by the
Issuing Bank in an interest-bearing cash collateral
account as collateral hereunder; and"
16. Exhibits. Exhibits D and E to the Loan
Agreement are amended to be in the forms attached to this
Amendment. Exhibit J is in the form attached to this
Amendment.
17. Conditions Precedent. This Amendment shall
become effective on May 6, 1994, provided that on or before
such date the following conditions precedent have been
satisfied:
(a) The Managing Agent shall have received executed
counterparts of this Amendment from Borrower and Banks
comprising at least the Majority Banks; and
(b) The Managing Agent shall have received from each
obligor under the Subsidiary Guaranty its written consent
to this Amendment, in form and substance satisfactory to
the Managing Agent.
18. Counterparts. This Amendment may be executed in
counterparts in accordance with Section 11.7 of the Loan
Agreement.
19. Confirmation. In all other respects, the Loan
Agreement is confirmed.
This Amendment is dated as of May 6, 1994.
CIRCUS CIRCUS ENTERPRISES, INC.
By: __________/s/_____________
Its:______________________
BANK OF AMERICA NATIONAL TRUST and
SAVINGS ASSOCIATION, as Managing
Agent
By: __________/s/_____________
Its:______________________
BANK OF AMERICA NATIONAL TRUST and
SAVINGS ASSOCIATION, as a Bank
By: __________/s/_____________
Its:______________________
CIBC, INC, as Co-Managing Agent and
as a Bank
By: __________/s/_____________
Its:______________________
THE LONG-TERM CREDIT BANK OF JAPAN,
LTD., LOS ANGELES AGENCY, as Co-Agent
and a Bank
By: __________/s/_____________
Its:______________________
FIRST INTERSTATE BANK OF NEVADA,
N.A., as Co-Agent and a Bank
By: __________/s/_____________
Its:______________________
SOCIETE GENERALE, as Co-Agent and a
Bank
By: __________/s/_____________
Its:______________________
CREDIT LYONNAIS CAYMAN ISLAND BRANCH,
as Co-Agent and a Bank
By: __________/s/_____________
Its:______________________
CREDIT LYONNAIS LOS ANGELES BRANCH,
as Co-Agent and a Bank
By: __________/s/_____________
Its:______________________
CONTINENTAL BANK N.A., as a Bank
By: __________/s/_____________
Its:______________________
WESTDEUTSCHE LANDESBANK GIROZENTRALE,
NEW YORK AND CAYMAN ISLANDS BRANCHES
By: __________/s/_____________
Its:______________________
THE MITSUBISHI TRUST AND BANKING
CORP., LOS ANGELES AGENCY, as a Bank
By: __________/s/_____________
Its:______________________
THE SUMITOMO BANK, LIMITED, LOS
ANGELES BRANCH, as a Bank
By: __________/s/_____________
Its:______________________
THE TOKAI BANK, LTD., LOS ANGELES
AGENCY, as a Bank
By: __________/s/_____________
Its:______________________
UNITED STATES NATIONAL BANK OF
OREGON, as a Bank
By: __________/s/_____________
Its:______________________
THE INDUSTRIAL BANK OF JAPAN LIMITED,
LOS ANGELES AGENCY, as a Bank
By: __________/s/_____________
Its:______________________
MIDLANTIC NATIONAL BANK, as a Bank
By: __________/s/_____________
Its:______________________
THE NIPPON CREDIT BANK, LTD.,
LOS ANGELES AGENCY, as a Bank
By: __________/s/_____________
Its:______________________
THE YASUDA TRUST & BANKING CO., LTD.,
LOS ANGELES AGENCY, as a Bank
By: __________/s/_____________
Its:______________________
BANK OF AMERICA NEVADA, as a Bank
By: __________/s/_____________
Its:______________________
NATIONSBANK OF TEXAS, N.A.,as a Bank
By: __________/s/_____________
Its:______________________
AMENDMENT NO. 2
(Reducing Revolving Loan Agreement)
Reference is made to that certain Reducing Revolving
Loan Agreement dated as of September 30, 1993 (the "Loan
Agreement") among Circus Circus Enterprises, Inc., The Long-
Term Credit Bank of Japan, Ltd., Los Angeles Agency, First
Interstate Bank of Nevada, N.A., Societe Generale, Credit
Lyonnais Los Angeles Branch and Credit Lyonnais Cayman Island
Branch, all as Co Agents, CIBC Inc., as Co-Managing Agent,
Bank of America National Trust and Savings Association, as
Managing Agent, and the Banks therein named, as amended by
Amendment No. 1 dated May 6, 1994. Terms defined in the Loan
Agreement are used herein with the same meanings.
The parties hereto agree as follows:
1. Section 1.1. Section l.1 of the Loan
Agreement is amended to restate the following defined terms
set forth therein to read as follows:
"Disposition" means the sale, transfer or other
disposition of any asset of Borrower or any of its Restricted
Subsidiaries other than (i) inventory or other assets sold or
otherwise disposed of in the ordinary course of business of
Borrower or a Restricted Subsidiary, (ii) equipment sold or
otherwise disposed of where substantially similar equipment
in replacement thereof has theretofore been acquired, or
thereafter within 90 days is acquired, by Borrower or a
Restricted Subsidiary, (iii) a disposition to Borrower or a
Restricted Subsidiary or to a New Venture Entity in
connection with a New Venture Investment, and (iv) a
disposition of Property acquired by the Borrower or any of
its Restricted Subsidiaries as, or as part of, a New Venture,
where such disposition is made pursuant to an obligation to
sell or a right to purchase such Property, which obligation
or right was created substantially concurrently with the
acquisition of such Property or the formation of the New
Venture Entity.
"Negative Pledge" means a Contractual Obligation
that contains a covenant binding on Borrower or any of its
Restricted Subsidiaries that prohibits Liens on any of its
Restricted Subsidiaries that prohibits Liens on any of its or
their Property, other than (a) any such covenant contained in
a Contractual Obligation granting a Lien permitted under
Section 6.9 which affects only the Property that is the
subject of such permitted Lien, (b) any such covenant that
does not apply to Liens securing the Obligations, and (c) any
such covenant that applies only to a New Venture Investment
of Borrower or any of its Restricted Subsidiaries or to the
Property of the corresponding New Venture Entity.
2. Section 6.9. Section 6.9 of the Loan
Agreement is amended by restating clause (j) set forth
therein (pursuant to Amendment No.1 dated as of May 6, 1994)
to read as follows:
"(j) a Negative Pledge on the shares of capital
stock (or other evidence of an Investment) owned by
Borrower or any of its Restricted Subsidiaries in any
New Venture Entity or in any Restricted Subsidiary that
manages or operates such New Venture Entity, in favor
of any lender to such New Venture Entity;"
3. Counterparts. This Amendment may be executed
in counterparts in accordance with Section 11.7 of the Loan
Agreement.
4. Confirmation. In all other respects, the Loan
Agreement is confirmed.
This Amendment is dated as of August 4, 1994.
CIRCUS CIRCUS ENTERPRISES, INC.
By:__________/s/_____________
Its:_________________________
BANK OF AMERICA NATIONAL TRUST
SAVINGS ASSOCIATION, as Managing
Agent.
By:__________/s/______________
Its:__________________________
BANK OF AMERICA NATIONAL TRUST and
SAVINGS ASSOCIATION, as a Bank
By:__________/s/______________
Its:__________________________
CIBC, INC, as Co-Managing Agent and
as a Bank
By:__________/s/______________
Its:__________________________
THE LONG-TERM CREDIT BANK OF JAPAN,
LTD., LOS ANGELES AGENCY, as Co-
Agent and a Bank
By:__________/s/______________
Its:__________________________
FIRST INTERSTATE BANK OF NEVADA,
N.A., as Co-Agent and a Bank
By:__________/s/______________
Its:__________________________
SOCIETE GENERALE, as Co-Agent and a
Bank
By:__________/s/______________
Its:__________________________
CREDIT LYONNAIS CAYMAN ISLAND
BRANCH, as Co-Agent and a Bank
By:__________/s/______________
Its:__________________________
CREDIT LYONNAIS LOS ANGELES BRANCH,
as Co-Agent and a Bank
By:__________/s/______________
Its:__________________________
CONTINENTAL BANK N.A., as a
Bank
By:__________/s/______________
Its:__________________________
WESTDEUTSCHE LANDESBANK
GIROZENTRALE, NEW YORK AND
CAYMAN ISLANDS BRANCHES
By:__________/s/______________
Its:__________________________
THE MITSUBISHI TRUST AND BANKING
CORP., LOS ANGELES AGENCY, as a
Bank
By:__________/s/______________
Its:__________________________
THE SUMITOMO BANK, LIMITED, LOS
ANGELES BRANCH, as a Bank
By:__________/s/______________
Its:__________________________
THE TOKAI BANK, LTD., LOS ANGELES
AGENCY, as a Bank
By:__________/s/______________
Its:__________________________
UNITED STATES NATIONAL BANK OF
OREGON, as a Bank
By:__________/s/______________
Its:__________________________
THE INDUSTRIAL BANK OF JAPAN
LIMITED, LOS ANGELES AGENCY, as a
Bank
By:__________/s/______________
Its:__________________________
MIDLANTIC NATIONAL BANK, as a
Bank
By:__________/s/______________
Its:__________________________
THE NIPPON CREDIT BANK, LTD.,
LOS ANGELES AGENCY, as a Bank
By:__________/s/______________
Its:__________________________
THE YASUDA TRUST & BANKING CO.,
LTD., LOS ANGELES AGENCY, as a Bank
By:__________/s/______________
Its:__________________________
BANK OF AMERICA NEVADA, as a
Bank
By:__________/s/______________
Its:__________________________
NATIONSBANK OF TEXAS, N.A.,as a
Bank
By:__________/s/______________
Its:__________________________
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<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> JAN-31-1995
<PERIOD-END> OCT-31-1994
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0
0
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